Kyrgyzstan authorities trumpet entrepreneurs’ achievements as problems remain

BISHKEK (TCA) — On September 20, Kyrgyzstan marked its Entrepreneur’s Day. Traditionally, the country’s top leadership congratulated entrepreneurs, giving diplomas and memorable gifts to outstanding business people for their “fruitful work and significant contribution to the social and economic development of the country”.

President

In his address to entrepreneurs, President of Kyrgyzstan Almazbek Atambayev once again announced his well-known phrase that “Kyrgyzstan should become a haven for business, investors and entrepreneurs, local and foreign, large and small.”

Entrepreneurs create jobs and pay taxes, replenishing the state budget, Atambayev said.

“You are forming a cohort of enterprising and energetic people, who having managed to organize their business and implement new ideas and projects, are now actively contributing to the development of the country,” the President said.

The President spoke about the growth of small and medium-sized businesses. For the first half of 2017, the country’s GDP grew by 6.7%, while exports increased by 30%. For comparison, in 2016 the country’s GDP grew by 3.8%, while exports grew by 17%. According to official data, 40% of GDP is made up by SMEs.

Government

Business is the main locomotive and support of the country’s social and economic development, attracting investments, introducing new technologies, expanding the market of goods and services, and as a result increasing competitiveness and diversification of the country’s economy, Prime Minister of Kyrgyzstan Sapar Isakov said. Entrepreneurs also contribute to the solution of many social problems.

A dialogue with business is conducted to achieve a balance of interests. Measures are taken for full-scale access to the Eurasian market, which provides opportunities for free movement of goods, services, capital and labor.

To create favorable conditions for business development and increase their competitiveness, reforms have been carried out to liberalize fiscal legislation and regulate business.

Tax administration procedures have been simplified, and an electronic system for filing tax reports has been introduced. To protect domestic producers and reduce the illegal import of goods, the measures of accounting are strengthening and minimum control of prices established.

The number of state controlling bodies has been reduced, while newly created enterprises are exempted from inspections for three years.

The “Forty Steps to the Future” Government Program provides for the creation of a favorable business environment and incentives for adaptation to new economic conditions and for attracting investments.

According to First Deputy Prime Minister of Kyrgyzstan Tolkunbek Abdygulov, the Taza Koom (Clean Society) national project, included in the Program, will help remove bureaucracy and corruption through digitalization. The Government also intends to provide financial support to export-oriented businesses, Abdygulov said.

The Government plans to digitize the work of the State Tax Service. This will facilitate the work of entrepreneurs who now have to spend a lot of time for tax procedures.

Prime Minister Isakov paid special attention to women entrepreneurs who, “along with supporting their families and raising children, make an invaluable contribution to the development of the country’s economy, creating jobs and increasing tax revenues”.

In the first seven months of 2017, Kyrgyzstan’s exports increased by 27.1%, and exports to the Eurasian Economic Union countries grew 32.7%, Economy Minister Artem Novikov said. This shows that domestic business has gradually begun to enter foreign markets and take advantage of the Eurasian economic integration, he said.

Novikov urged entrepreneurs to pay more attention to solving the problems of small-commodity production and its certification.

Parliament

To create a dialogue platform between the state and entrepreneurs, the Jogorku Kenesh (Parliament) of Kyrgyzstan in January 2017 established the Council for Business and Entrepreneurship Development.

The parliament has adopted a package of legislative documents aimed at simplifying business operations and eliminating administrative barriers, and opening credit lines for businesses. The opening of a Kyrgyz-Chinese Fund is planned, Parliament Speaker Chynybai Tursunbekov said. He heads the Council which includes MPs, representatives of state bodies, and 21 representatives of the business community.

The Council is waiting for proposals from the business community to develop the necessary documents. “Adoption of jointly drafted laws will ease the conditions for entrepreneurs and improve the business climate in the country,” Tursunbekov concluded.

Business

It is necessary to intensify the relationship between the business and the State, the business community believes.

According to experts, organized business structures unite only 17% of all economic entities. There are about one hundred business associations in Kyrgyzstan. Many of them are weak and ineffective due to internal flaws in business communities and the policy of the state, which seeks to retain the leading role in the transformation process, the Chamber of Commerce and Industry of Kyrgyzstan said.

Most business associations do not have sufficient capacity to promote their members’ interests through legal, expert, and analytical support of various business initiatives. To solve this problem, the Chamber submitted its proposals to the Economy Ministry.

The new Government Program provides for a drastic revision of the interaction between business and the State. Partnerships will be built with the maximum transfer of self-regulation functions to the business community, while strengthening the role of business associations and the responsibility of entrepreneurs.

A significant gap in the volume of attracted investments between the country’s regions remains an acute problem. The Government Program pays special attention to regional development, taking into account their specialization and launching cluster projects. The business community plans to actively participate in the development of the regions to reduce the gaps in the standards of living in the regions.

To implement its goals, the business community has to consolidate for more effective promotion and protection of their interests.